Abstract

In 2009, a group of member countries of the International Energy Agency (IEA) spearheaded the creation of a new international organization, the International Renewable Energy Agency (IRENA), despite the fact that the IEA had been working on renewables for decades. Why would states create an overlapping organization, thus advancing the overall degree of fragmentation? Drawing on the work of Mansfield and Moravcsik, this article provides an explanation based on domestic preferences and institutional capture. Viewed thus, IRENA was part of an institutional hedging strategy instigated by domestic actors in Germany and allied states to counter the IEA’s alleged normative bias toward the fossil and nuclear energy industries with a wider set of alternative energy options. The article suggests that, depending on the domestic preferences of a set of states capable to innovate, the transaction costs associated with institutional reform may surmount those of institutional creation.